Alternative Visions- Soft Landing’ Revisited & Previewing 2023 GDP

Whether ‘soft landing’ of the US economy—with inflation assumed to continue to abate and GDP to continue to grow—is in the works is the main topic of today’s show. Explained in depth is how US price index estimates are key to determine whether ‘soft landing’ will occur. Dr. Rasmus explains how the 3 US price indexes (CPI, PCE, GDP Deflator) are basically estimated, and why the lowest inflation estimator, the GDP Deflator, which is used to come up with GDP numbers, artificially boosts real GDP thus making a ‘soft landing’ look more likely. Rasmus also explains how artificial boosts to GDP were made possible by the redefinitions to GDP introduced in 2013 and in effect ever since.  Explained is if the CPI were used to adjust for inflation instead of GDP deflator, and if the questionable 2013 redefinitions are backed out of GDP calculation, 2023 GDP would now be stagnant at best; and if a more accurate CPI were used (with an inflation rate of around 5-6%) GDP 2023 would already be contracting, with a further contraction coming in first half 2024 now that prices for energy and other services are rising again. Rasmus thus argues Soft landing scenarios are exaggerated by the Inflation indexes (especially the GDP deflator) as well as result of past GDP redefinitions. In the last third of today’s show Dr. Rasmus previews some of the content and themes in his latest forthcoming 2024 book, “American Empire in Decline”.